The domestic RHI scheme

The domestic RHI scheme opened on 9 April 2014.

It is a financial incentive scheme designed to encourage uptake of renewable heating among domestic consumers. The domestic RHI is targeted at, but not limited to, homes off the gas grid. Those without mains gas have the most potential to save on fuel bills and decrease carbon emissions.

The scheme will cover single domestic dwellings and will be open to homeowners, private landlords, social landlords and self-builders. It will not be open to new build properties other than self-build.

The domestic RHI will pay the following tariffs per unit of heat generated for seven years:

The tariffs have been set at a level that reflects the expected cost of renewable heat generation over 20 years. Payments will be made on a quarterly basis.

Domestic RHI Payment Calculator

If you are thinking about installing a renewable heating system then an online tool.has been developed to help you calculate how much you might receive through the Domestic RHI Scheme.

By inputting a few simple details the Domestic RHI Payment Calculator will be able to provide you with an estimate regardless of whether or not you have decided on installing a particular technology. You can also compare estimates across different technologies if you wish. You will be able to obtain an estimate both with and without an Energy Performance Certificate.

The domestic Renewable Heat Incentive (RHI) launched on the 9th April 2014. On 10 November 2014 we announced our intention to amend the regulations to make some small changes to the policy, based on experiences and feedback. These changes came into force on February 5th 2015.

At the time of the July announcement we still needed to finalise when legacy applicants would be able to apply for the scheme, the details of how we would manage the domestic RHI budget, treatment of some types of subsidy and confirmation of the solar thermal tariff. These details are now set out in ‘Further details of the domestic Renewable Heat Incentive’, which was published on 4 December 2013. This document also provides an update on implementation of the biomass sustainability requirements.

The Government is proposing an amendment to the Infrastructure Bill 2014/15 which will introduce an amendment to the primary legislation governing the Renewable Heat Incentive (RHI) schemes. The proposed amendment would allow participants to allocate their RHI payments to third parties and allow the Secretary of State to appoint an alternative body to deliver the schemes in the future. The amendment would also allow some future changes to the scheme to be made by the negative resolution procedure.

RHI financing models call for evidence

On 28 January 2015 the RHI launched a six week call for evidence to seek information and evidence to inform the development of policy to amend regulations to allow additional financing options into the domestic RHI. There are also a small number of questions on the non-domestic RHI, seeking initial views on whether there is a case for making any similar changes to the non-domestic scheme. A consultation would take place before any changes were made to the non-domestic scheme. Contribute here by 13 March 2015 or via the e-consultation.

This is a £650,000 fund aimed at expanding the skill set of domestic heating engineers to include the installation and maintenance of renewable heating systems. This is an important step to boost the installer base and supply chain.

Giving consumers and installers reliable information is an important part of helping them make decisions about their heating system. With the launch of the domestic Renewable Heat Incentive it is important to ensure that consumers have a range of installers to consult, and that these installers are trained to the very latest standards.

The non-domestic RHI scheme

The non-domestic RHI scheme has been open to commercial, industrial, public sector, not for profit and heat networks since November 2011. The scheme is designed to bridge the gap between the cost of fossil fuel heat installations and renewable heat alternatives through financial support for owners.

Expansions and improvements to the non-domestic RHI

The government response published on 4 December 2013 sets out a series of improvements and increased support under the non-domestic scheme. Response documents for the three consultations are available below:

The regulations which bring in these changes, as well as refinements on the rules of eligibility and operation of the scheme, were approved by Parliament on 15 April 2014 and came into force on 28 May 2014.

Position paper on tariff guarantees

In the December 2013 government response “Improving Support, Increasing Uptake”, we reiterated our intention to introduce a form of tariff guarantee for the largest installations, subject to successful demonstration that a tariff guarantee is affordable and good value for money, and securing State Aid and Parliamentary approval.

This position paper on tariff guarantees should provide more clarity as to our latest thinking on how tariff guarantees might operate and seeks views on the design. Any decisions on tariff guarantees will be taken alongside wider decisions on the RHI policy as part of the next Spending Round.

Evidence gathering on potential renewable heating technologies

DECC commissioned research into the cost and performance of technologies which are not currently eligible for the RHI but could be considered for future inclusion. DECC identified five technologies that could offer the potential to increase deployment of renewable heat, but which were not underpinned by robust independent evidence to inform whether they should be included in the RHI. The research publications provide an overview of the technologies as well as additional clarification on the scheme’s evidence requirements.

Consultation on the Biomethane injection tariff review

The RHI was introduced to help meet the UK’s target of 15% of our energy coming from renewables by 2020. When the scheme was first launched in 2011, the biomethane to grid support was a ‘one sizes fit all’ tariff based on a relatively small scale 1MW waste feedstock biomethane plant. It was recognised that over time, this level of support might need adjusting.

On 28 February 2014 we announced a review of the biomethane to grid tariff in response to market intelligence, stakeholder representations and updated evidence indicating that plants of much higher capacities than 1 MW are planned or in the pipeline; and that the costs of those larger plants (that could achieve significant economies of scale) may not justify the current level of RHI support. DECC ran a four week consultation from 30 May - 27 June 2014, seeking evidence and input from industry to ensure that the RHI continues to support sustainable growth in the biomethane to grid market.

In light of the volume of consultation responses received and our wish to provide industry with more certainty, we published a consultation update on 8 July 2014, which included confirmation that any changes to the biomethane to grid tariff will not take effect before 1st December 2014.

Tiered Biomethane injection to grid tariff introduced

In May 2014, we published a formal consultation setting out our proposals to review the biomethane injection to grid tariff under the Renewable Heat Incentive (RHI). Since then DECC has engaged extensively with stakeholders on our proposals and received over 60 responses to the consultation. This is the formal Government response to our consultation which sets out how we will revise the biomethane injection to grid tariff.

A tiered ‘biomethane injection to grid’ tariff was introduced on 12 February 2015. The biomethane tariff will be protected from a degression in April 2015 which will provide a period of tariff stability. The new tariff will be subject to degression again from 1 July 2015 reflecting the need to balance certainty with effective budget management of the RHI scheme.

Minor Amendments to the Non-domestic RHI Scheme

On 12 February 2015 a number of minor changes came into force for the Non-Domestic RHI.

We have introduced greater flexibility into the scheme rules including:

Underground piping – a heat loss calculation will now not have to be made if underground piping meets the relevant British Standard

Sanctions – Clarification on when the scheme administrator can carry out its assessment of whether scheme eligibility criteria have been met and apply sanctions

Metering – Introducing flexibility in cases where meters don’t exactly meet manufacturers’ instructions, but which would make no material difference to their payments

The regulation change also makes amends to the financial control mechanism to reflect changes affecting biomethane plants, together with some minor improvements.

Air quality emissions limits for biomass boilers and CHP

In March 2011 the Government published its policy for the non-domestic RHI, including the intention to introduce air quality emission limits for biomass boilers (including CHP) that participate in the scheme. Proposed limits were first published for consultation in 2010. These limits were confirmed earlier this year, with the maximum permitted emissions being 30 grams per gigajoule (g/GJ) net heat input for PM and 150g/GJ for NOx.

As of 24 September 2013, if you are planning to apply for the non-domestic RHI with a biomass boiler (including CHP) your installation will need to have emissions levels no higher than 30 grams per gigajoule (g/GJ) net heat input for PM and 150g/GJ for NOx. Proof that your system does not exceed these limits will need to be provided to Ofgem on application and be in the form of either an RHI emissions certificate or an environmental permit. Ofgem will contact you if this certificate is incomplete, which could delay your accreditation process. Ofgem will also retain the information on the certificate to support their auditing process in the future.

Our air quality factsheet answers a number of frequently asked questions and an example of an emissions certificate so you can ensure that the certificate you plan to submit meets the scheme requirements. If you submit an incomplete certificate it will delay your accreditation, therefore it may be advisable to check with your installer or boiler manufacturer to confirm your boiler’s RHI emissions certificate meets the requirements of the scheme.

When these regulations first came into force on 24th September, there was a minor discrepancy that meant that it was not possible for every type of boiler to meet the standards as originally drafted.

The regulations have now been rectified so that they deliver the full policy intent. The amending regulations have completed their passage through Parliament and came into force on 13th December 2013.

Metering and minor regulatory changes

As of 24 September 2013, there are new regulations in place that modify the eligibility requirements regarding metering in the non-domestic scheme, which also provide flexibility in the way in which heat loss in a heating system can be calculated.

This includes the use of heat loss calculations where it is not appropriate to install meters, and participants will also be able to disregard heat loss from external pipes that are less than 10 meters in combined length providing they are insulated to the specified standards. Equivalent pipes over 10m in length will be able to use heat loss calculations in place of metering.

In addition, the regulations make a number of small amendments which include:

allowing accredited installations to be moved to different locations

clarifying that water in the ground may be used as an energy source by a ground source heat pump

making outdoor commercial cleaning and drying processes eligible for the scheme nd

allowing RHI installations to be used as the assessment installation when installers join the Microgeneration Certification Scheme (MCS)

Consultations on the non-domestic RHI

It is vital that we get the level of support right so that the market can invest with confidence, cost reductions can be achieved and the market can grow sustainably. Since the start of the scheme we have been able to collect more data and gather additional evidence from industry on heat usage assumptions, appropriate tariff levels and the practical application of the scheme. We have held a number of public consultations to gather feedback on improvements to scheme design, inclusion of more technologies and an increase in some tariff levels. These are summarised in the table below:

Title

Consultation launch

Aim

Government response

Link to policy

Providing certainty, improving performance

July 2012

Providing greater certainty to participants and improving the application process

Non-domestic RHI review

In February 2013 we made a commitment to review the non-domestic RHI and in summer 2013 we started work to scope the extent of such a review. Following constructive stakeholder feedback to our proposals, we are now focusing on eight key areas for change and improvement. The policy paper below summarises stakeholder feedback and our plans for the future. Any comments on the Review can be fed back via rhi@decc.gsi.gov.uk

Biomass sustainability

New sustainability criteria for the Renewable Heat Incentive (RHI) have been introduced to ensure all installations using biomass fuels meet the government’s environmental objectives. This affects domestic and non-domestic RHI participants as well as producers and traders of biomass fuels.

The biomass sustainability RHI regulations came into force on 5 February 2015, with the obligation on RHI participants to meet the sustainability requirements from 5 October 2015. This is to help provide sufficient lead time for participants to fully understand the requirement and how to demonstrate compliance, and for suppliers on the BSL to ensure they have the necessary supply chain evidence in place to demonstrate they meet the land use criteria.

For more information on the new RHI biomass sustainability requirements and how to meet them please read our information leaflets.

Updated Biomass and Biogas Carbon Calculator (B2C2) User Guidance

The UK Solid and Gaseous Biomass Carbon Calculator (B2C2) is designed to help companies and individuals calculate the carbon intensity of the electricity, heat or biomethane produced from solid biomass or biogas. The B2C2 user guidance has been updated providing additional guidance to the different types of users, including biomass producers and traders and RHI participants, who may be required to use the tool to demonstrate compliance with the greenhouse gas criteria. The B2C2 calculator and updated B2C2 user guidance can be found on the Ofgem website.

Biomass and Biogas Carbon Calculator and Land Criteria Workshops

All current and future RHI participants will need to demonstrate compliance with the criteria from October 2015. We are running a series of workshops for RHI participants, biomass producers and traders across the UK. The aim of the workshops is to train participants: how to use the Biomass and Biogas Carbon Calculator (B2C2), which can be used to demonstrate compliance with the greenhouse gas (GHG) emissions savings criteria; and how to ensure that biomass used in heat generation complies with the land criteria and is legal and sustainable.

We are hosting four workshops running from 09:00 to 16:30 on the following dates and locations:

11 March – Glasgow;

12 March – Leeds;

26 March – London; and

31 March – Cardiff

Please contact rhi@decc.gsi.gov.uk with the subject ‘renewable heat incentive – b2c2 and land criteria workshops’ for more information.

Biomass Suppliers List

The Biomass Suppliers List (BSL) was launched to applications from producers and traders of woodfuel and Short Rotation Coppice, as well as self-suppliers on 30 April 2014. Producers and traders who wish to access the growing RHI market, and RHI participants who supply their own woodfuel are encouraged to to apply in good time before the requirements are enforced next Spring.

The BSL will provide a simple, light touch way for RHI participants to comply with biomass sustainability criteria. The list is now publically available online to enable consumers to find suppliers selling woodfuels that meet the forthcoming RHI sustainability criteria. The BSL is operated by the BSL Administrator. DECC has appointed Gemserv, partnering with Woodsure, HETAS and Borough IT, to act as the BSL Administrator.

Budget management

Funding the RHI

After consulting in summer 2012, in April 2013 we implemented a transparent budget management mechanism in the non-domestic scheme, called degression. This ensures that budgets are sustainable over the period April 2013 to March 2015.

We publish monthly data on scheme uptake and reduce tariffs, where necessary, on a quarterly basis.

Following further consultations in 2013 and agreement of DECC’s budget for the RHI in 2015/16, we have made adjustments to our approach to budget management.

This recognises decisions to increase tariffs (proposed in the 2013 Tariff review consultation) and the expansion of the current non-domestic scheme (proposed in September 2012 consultation).

Budget management of domestic RHI

The budget for the domestic RHI is also managed using degression. This is a gradual reduction of tariffs for new applicants once certain trigger levels of spend are reached.

Details on how the domestic scheme degression mechanism operates are available in our Domestic degression factsheet, published in June 2014.

Once you’ve started the application process and afterwards, contact the Ofgem Domestic RHI Applicant Support Centre with any queries:

Contact Ofgem’s Non-Domestic RHI team if you would like to apply for the scheme, if you require support with the application process, or if you have queries regarding the progress of your application, the eligibility requirements or Ofgem’s published guidance

Update to the RO page on the cap on new build dedicated biomass generating capacity.

2 August 2013 2:05pm

Air quality factsheet added.

12 July 2013 1:18pm

An update on the domestic RHI scheme.

31 May 2013 2:01pm

Updated Non-Domestic RHI content to reflect tariff review

22 May 2013 12:30pm

Letter published from Ed Davey to Institute of Acoustics following their 'good practice guide on the implementation of ETSU-R-97 guidelines for the assessment and rating of noise from wind farms'.

3 May 2013 9:58am

Update to budget management of non-domestic RHI

23 April 2013 9:30am

Feed in tariffs deployment data updated.

9 April 2013 10:11am

Updated with letter from Edward Davey to Maria McCaffery at Renewable UK on grace periods for onshore wind.

26 March 2013 12:47pm

'The Future of Heating: Meeting the challenge' has been published today and sets out specific actions to help deliver low carbon heating across the UK in the decades to come. In addition there are announcements today on domestic and non-domestic RHI.